Unit Twelve

1. Unit Twelve U.S. History

2. Tariff tension Uneven distribution of wealth/income Failure to understand international economic issues/trends/policies Overproduction of consumer goods Overspeculation/ Investment “playing the market” Buying on margin (10% down payment) Excessive use of credit Weak farm economy Causes of the Great Depression

4. Banks closed Stock market prices dropped Serious economic downturn Unemployment Poverty and homeless increased Mortgages foreclosures/evictions Effects of the Great Depression

5. Hoover’s Reaction • Assumed the crisis would be brief • Urged businesses to cut wages • Unions not to strike • Urged private charities to increase their efforts for the needy and jobless. • Hesitated to bring government into it, feared Americans would lose self-reliance • Believed public relief should come from the state and local governments and not the federal government

6. The worst mistake of his presidency Hawley-Smoot Tariff 1930 • Highest tariff in American history - increased tax rate on foreign imports to protect American markets from foreign competition. • In retaliation, European nations enacted higher tariffs of their own against U.S. goods. • The effect—trade was reduced for all nations deepening the depression at the national and international levels.

7. TOO LITTLE, TOO LATE • Debt moratorium - suspended collection of payments on international debts • Federal Farm Board - assistance to indebted farmers • Reconstruction Finance Corporation - emergency loans to struggling businesses –railroads, banks, life insurance companies, and other financial institutions. • The benefits would then “trickle down” to smaller businesses and ultimately bring recovery

8. Initial Reaction of the People • Farm Holiday Association • Bonus march

9. Republicans nominated Hoover Believing a Democratic victory would worsen the Depression Democrats nominated NY governor Franklin D. Roosevelt. FDR pledged: A “new deal” for the American people The repeal of Prohibition Aid for the unemployed Cuts in government spending The Election of 1932

10. Election Results • RESULTS 60% of the voters opted for a change and elected FDR • Socialists and many Republicans even supported FDR • Both houses in Congress also gained Democratic majorities • Lame duck president/Lame duck amendment (Twentieth Amendment)

11. FDR National Monument

12. Only child to a wealthy NY family Admired Teddy Roosevelt NY state legislator, U.S. assistant secretary of the navy VP candidate (James Cox) vs. Harding 1920 landslide Contracted polio in 1921 Warm personality, gifted speaker, & able to work with and inspire people Became NY Governor in 1928 Instituted a number of welfare and relief programs to help the jobless. Married to his cousin, Expanded the size of the government Enlarged the powers of the presidency. Stayed in office 12 years elected 4 times One of the most influential world leaders of the 20th century FDR: A Profile

13. New Deal Philosophy • Relief for the people out of work • Recovery for businesses and the economy • Reform of American institutions

14. Brain Trust • Advisors from his NY days • University professors • Great diversity in his administration: record number of African Americans, Catholics, Jews, and women. (Secretary of Labor, Frances Perkins, 1st woman to serve in a president’s cabinet • Black Cabinet -Mary McLeod Bethune (close to Eleanor Roosevelt)

15. 1st Hundred Days • Hundred day long special session in Congress • Congress passed into law every request of the president enacting more legislation than any single Congress in history • The new laws and agencies were commonly referred to by their initials: WPA, AAA, CCC, NRA

16. Bank Holiday -closed banks to reorganize and regain stability Repeal of Prohibition Beer-Wine Revenue Act/Twenty-first Amendment Fireside Chats used radio to communicate directly to the American people Immediate Action

17. Financial recovery reform • The Emergency Banking Relief Act—bank holiday • The Federal Deposit Insurance Corporation -FDIC insure deposits up to $5000 • The Home Owners Loan Corporation -refinancing for small homes • The Farm Credit Administration- low interest farm loans and mortgages

18. Relief for the unemployed • Federal Emergency Relief Agency - grants to state and local governments to aid the jobless and homeless • Public Works Administration - money for building roads, bridges, dams, and other public works (source of thousands of jobs) • Civilian Conservation Corps employed young men on federal lands   • The Tennessee Valley Authority —built dams, operated electric power plants, controlled flooding and erosion, and manufactured fertilizer in on the nation’s poorest regions

19. Industrial Recovery • National Recovery Administration - set codes for wages, hours of work, levels of production, and prices of finished goods. • Workers were allowed to organize and bargain collectively • Schechter v. U.S. Supreme Court declared the NRA unconstitutional

20. Farm Relief • Agricultural Adjustment Administration AAA • Encouraged farmers to reduce production and thereby boost prices by offering to pay government subsidies (financial assistance) for every acre they plowed under.

21. Other programs • Civil Works Administration – hired laborers for temporary construction projects • Securities and Exchange Commission- regulated the stock market • Federal Housing Administration- construction industry and homeowners boosted by insuring bank loans for building new houses and repairing old ones •  Took the U.S. off of the gold standard: $35 per ounce of gold but paper dollars were not redeemer in gold)

22. Most active first lady in history Newspaper column Speeches Traveling Great respect for her husband/marriage was strained Served as the president’s social conscience and influenced him to support minorities and the less fortunate Compassionate Eyes and ears Eleanor Roosevelt

23. Second New Deal • The first two years focused on RECOVERY, the new batch of legislation focused on RELIEF and REFORM

24. Second New Deal Relief • Works Progress Administration- spent billions of dollars 1935-1940 creating jobs—constructing new bridges, roads, airports, and public buildings. • -Unemployed artists, writers, and actors were paid to paint murals, write histories, and perform in plays • Resettlement Administration- provided loans to sharecroppers, tenants, and small farmers, and set up camps for migrant workers

25. Reforms • National Labor Relations (Wagner) Act 1935- guaranteed workers right to join a union and a union’s right to bargain collectively. Created the National Labor Relations Board NLRB to enforce the law and make sure workers’ rights were protected • Rural Electrification Administration REA- offered loans for electrical cooperatives to supply power in rural areas • Federal Taxes - increased the tax of the wealthy few.

26. SOCIAL SECURITY ACT 1935 • Affected the lives of nearly all Americans • Federal insurance program based upon the automatic collection of taxes from employees and employers throughout people’s working careers. • Retirees over the age of 65 received monthly payments • Unemployment compensations • Blind or disabled • Dependent children and mothers

27. FDR –Democratic candidate Republican candidate Alf Landon –progressive minded but critical of government spending FDR won in a landslide New coalition Solid South Ethnic whites in the cities Midwestern farmers Labor unions Now African Americans in northern cities Election of 1936

28. Liberal Critics Conservative Demagogues (political agitators) Father Charles E. Coughlin –inflated currency/nationalizing banks Dr. Francis E. Townsend - $200 month Senior Citizens Huey Long – “Share Our Wealth” $5000 for every American family Opponents of the New Deal

29. SUPREME COURT Ruled NRA and AAA unconstitutional Mandate- popular support- 1936 election Court-Packing Plan: Replace Justices over 70.5 (6) Both Democrats and Republicans were outraged Supreme Court eventually softened to New Deal FDR made several appointments Most Serious Challenge

30. New Deal was friendly to organized labor National Labor Recovery Act 1933 and the Wagner Act 1935 Union membership grew from 3 million in the early 1930s to over 10 million by 1941 AFL dominated skilled labor CIO emerged welcoming all laborers (targeted the automobile, steel, and textile industries) Rise of the Union

31. Fair Labor Standards Act • A minimum wage (e.g. 40 cents an hour) • A maximum work week of 40 hours and time and a half for overtime • Child labor restrictions on those under 16 -law was ruled unconstitutional in 1916 but reversed in 1941 and Fair Labor Standards Act was upheld by the Supreme Court)

32. Economic Downturn WHY? Social Security tax reduced consumer spending; FDR was also attempting to balance the budget & reduced government spending John Maynard Keynes Encouraged deficit spending - the government needed to spend in order to initiate economic growth “priming the pump” to increase investment and create jobs. Roosevelt Recession 1937

33. Keynesian Economics • FDR adopted this policy   • Still the Depression continued • Republicans and conservatives were elected in 1938 and blocked New Deal legislation, and aggressive actions of the Nazis drew attention to foreign affairs weakening the New Deal

34. Depression mentally-insecure Women – work-minded African American Democratic party (Eleanor and Marion Anderson vs. DAR) Executive Order 8802 (FEPC) A. Phillip Randolph Brotherhood of the Sleeping Car Porters March on Washington Indian Reorganization Act 1937 (Tribal) Mexican Americans Americans and the Depression